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New Study Shows U.S. is World Leader in Robotics Automation - With $732 Billion of Robots; Larger Than Economy of Switzerland

[March 15, 2017]

New Study Shows U.S. is World Leader in Robotics Automation - With $732 Billion of Robots; Larger Than Economy of Switzerland

A new study from Redwood
Software and the Centre
for Economic and Business Research (CEBR) finds that the U.S. is the
world leader in robotics automation investment, with an estimated
robotics stock of $732 billion* - larger than the economy of
Switzerland, which stood at $446 billion* in 2015.

U.S. investment in robotics was $86 billion in 2015, up from less than
$40 billion in 2009, when investment hit a low following the financial
crisis, and more than 15 times higher than the OECD average. Between
2011 and 2015, U.S. investments in robotics rose 30%.

"The U.S. is the world leader in robotics investment, and spending has
recovered quickly since the financial crisis in 2009," said David
Whitaker, Managing Economist at CEBR. "The sheer size of the economy and
its large base of production in the automotive and electronic sectors
make it a natural candidate for increased automation."

"The U.S. industrial sector is leading the world in its use of robotics
right across its operations," said Dennis Walsh, President, Americas and
Asia-Pacific at Redwood Software (News - Alert), which sponsored the study. "We
increasingly see corporations apply the value of robotics not only in
their assembly line, but also in areas such as supply chain and finance
departments."

"Robotics and automation in manufacturing has been a contentious topic
in the last 12 months - but the research shows that the sector is one of
the best places to invest today, and the returns are likely to improve
as time goes on," Mr. Walsh added.

This study focuses on the impact of robotics automation on economic
development across OECD countries, including the United Kingdom and the
United States. It considers trends in robotics automation, using the
latest date for 23 OECD countries over the period 1993 to 2015, before
applying a growth accounting framework and econometric analysis to
quantify the impact of robotics automation on two key macroeconomic
indicators: GDP per capita and labor productivity.

Worldwide, investment in robotics reached an 18-year peak in 2015, the
study showed. While robotics remains a relatively small part of the U.S.
and global economies, it has made a significant contribution to
worldwide GDP growth over the last 22 years, with this contribution
increasing to as much of 10% of total GDP growth in the last five years.

The study showed that investment in robotics has a greater positive
impact on the economy than more established sectors such as information
technology, construction and real estate - even though all these sectors
benefit from economies of scale that robotics cannot match.

"There is no doubt about it - robotics is a significant contributor to
economic growth today," Mr. Whitaker noted. "Robotics' cumulative impact
on the overall economy has been much larger compared to the dollar value
of robotics today. We expect to see progressively more robotic
automation in the years to come, with commensurate benefits to overall
economic growth."

"The pace of robotic automation has accelerated in recent years, as
technology grows ever more sophisticated," said Neil Kinson, Chief of
Staff at Redwood Software. "The new frontier for automation will be the
automation of mundane back office tasks, and an approach that focuses on
maximum efficiency for the task at hand, rather than simply swapping
human effort for machine effort."

Robots don't want your job

A dominant theme in discussion around robotics has been the fear that
increased robotic automation will lead to higher levels of unemployment.
While the study did not directly address this issue, evidence points
towards robotic automation being a positive for employment.

"There is clear evidence that points towards robotic automation in many
cases being a complement for human labor, rather than a direct
substitute. As more mundane tasks are automated, human effort becomes
more valuable as it is focused on higher-level tasks, creativity,
know-how and thinking," Mr. Whitaker said.

"Robotic automation is increasing the total number of jobs available -
but it is also changing them," Mr Kinson said. "The increased level of
automation investment highlights the need to rethink how we approach the
skillsets needed in the workplace, and the importance of working with
automation, and not against it."

Key Findings of the study include:

The United States has the world's largest robotic stock by dollar
value in PPP terms, worth $732 billion, up 50% from 2000.

The value of robotics investment in the United States reached $86
billion in 2015. This figure is more than 15 times the OECD average,
and more than twice the amount invested in 2009, when investment hit a
low following the financial crisis.

A review of recent related economic studies suggests that there is a
positive relationship between robotics automation and economic
development.

The results from CEBR's baseline econometric model suggest that a 1%
increase robotics investment is robustly associated with a long-run
increase in GDP per capita of 0.03.

The study found a positive association between robotics density (the
number of robot units per millions of hours worked) and labor
productivity.

Japan's stock of robots led the world in 1993 in terms of numbers of
units, but has plunged by more than 20% since then.

*Figures stated in 2010 Purchasing Power Parity (PPP) dollars

About Redwood Software:

Redwood Software was founded in 1993 with a single-minded mission - to
help organizations achieve The Robotic Enterprise™ and deliver a 100%
robotized back office, where all processes such as Record-to-Report,
Order-to-Cash, Procure-to-Pay, Human Capital and the Supply Chain are
run by robots and only include people where advanced judgment and
analysis is required. As back office processes add no value to the
business but are fundamental to the smooth running of operations,
robotizing is the ipso facto way to improve process efficiencies and
quality while freeing up budget and redirecting resources that can then
be utilized where it delivers real impact to the business such as in
customer care, marketing and product innovation.

Today more than 3,000 customers worldwide use Redwood's solutions to
automate their business processes. Visit www.redwood.com for
more information.

About CEBR:

CEBR is an independent economics and business research consultancy
established in 1992. CEBR delivers economic analysis and forecasts to a
wide array of retained private and public sector clients, and provides
bespoke economic impact analysis of different policies and regulations
at whole economy, sector and individual company levels.